Significant Controllers Register: How to Get It Right
In January 2018, the Hong Kong administration amended the Companies Ordinance (Cap. 622) and introduced the Significant Controllers Register (SCR) for all the companies registered in the jurisdiction. The primary goal was to prevent the abuse of company structure. However, compliance with this new regulation, from its conceptualization to implementation, has not been easy, especially for the new companies.
This brings about two questions that every entrepreneur who registers a company in Hong Kong need to ask, “What is Significant Controllers Register?” and “How do you do it right to avoid getting into conflict with the law?” To help you answer the questions, here is everything that you need to know about SCR:
What Does Significant Controllers Register Mean?
Before Hong Kong passed the Significant Controllers Register, companies in Hong Kong were only required to disclose the details of the direct shareholders and not the final beneficial owners who are referred to as ultimate beneficial owners (UBO). Since the ultimate beneficiaries wield a lot of control over how the company operates, the Hong Kong administration wanted to gather more details about them.
When you prepare SCR, the Companies Ordinance further demonstrates where it should be kept. The law requires that the register is kept in the company’s registered address. Although you are allowed to also store the register in any other designated place, the particulars of such a place have to be communicated to the Companies Registry.
To prepare the significant controllers register in Hong Kong, here is what you need to do.
- Include reasonable steps to note the controllers, including providing the notices needed to get their particulars.
- Gather the details of the significant controllers of your company.
- Enter the details on the significant controllers register and ensure it is up to date.
- Ensure the register is ready for inspection by the relevant authorities, including the Hong Kong Police Force, Insurance Authority, Customs and Excise Department, Companies Registry, and Inland Revenue Department, among others.
How to Get it Right on Significant Controllers Register
Note that preparing and keeping an updated Significant Controllers Register is mandatory. Indeed, failure to prepare the register and maintain it as required by law is considered a level 4 fine, which attracts a penalty of $25,000. Where applicable, a further daily fine of $700 might be imposed on your company.
To get it right on the significant controllers register, the best option is working with an expert agency in Hong Kong. These agencies have been in Hong Kong for some time and understand every bit of the Companies Ordinance, meaning that you can count on them to get it right on SCR. Indeed, you can even get the following additional services from the selected agency:
- Help with company incorporation in Hong Kong.
- Registration at the Business Registration Office of the Inland Revenue Department (IRD).
- The agency you select can serve as your company secretary and address.
- The agency can hold your hand to make the business successful, especially in the early days of operations in Hong Kong.
If you are planning to open a company in Hong Kong, it is important to ensure you understand all the legal requirements, including the significant controllers register. To cut the cost of operations, and make your operations in Hong Kong easy, make sure to work with the best agency. With experts on your side, you cannot go wrong.
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